B Mirror Report : Bangladesh Bank has announced that individual depositors of nine financially troubled non-bank financial institutions (NBFIs) will receive their full principal, following a government-backed support package of Tk5,000 crore to facilitate their liquidation. The move aims to safeguard individual savers while distinguishing them from institutional investors, who will rely on recoveries from asset sales.

Bangladesh Bank Governor Ahsan H. Mansur told The Business Standard that the government has agreed to provide funds needed to protect individual depositors after the central bank decided to wind up the nine NBFIs under the newly enacted Bank Resolution Ordinance 2025.

“Individual depositors will get back their principal. Interest payments will not be made,” Mansur said, emphasizing that institutional depositors will only receive whatever funds can be recovered through the liquidation of assets.

The Bangladesh Bank will appoint a liquidator for each institution to evaluate assets and liabilities, sell off recoverable loans, properties, and investments, and distribute the proceeds among creditors. “For instance, if Tk50 can be recovered against Tk100 of liabilities, institutional depositors will get Tk50,” the governor explained.

The central bank’s board had decided in December 2025 to liquidate a group of distressed NBFIs after their loan portfolios suffered massive defaults. For the first phase, the bank selected nine institutions whose combined depositor obligations could be covered within the Tk5,000 crore fiscal limit set by the government.

The nine NBFIs earmarked for liquidation are:
FAS Finance, Bangladesh Industrial Finance Company (BIFC), Premier Leasing, Fareast Finance, GSP Finance, Prime Finance, Aviva Finance, People’s Leasing, and International Leasing.

Earlier, in January 2025, Bangladesh Bank had classified 20 NBFIs as financially distressed, placing them in the “red” category due to high non-performing loans and depleted capital. These included CVC Finance, Bay Leasing, Islamic Finance, Meridian Finance, GSP Finance, Hajj Finance, National Finance, IIDFC, Premier Leasing, Prime Finance, Uttara Finance, Aviva Finance, Phoenix Finance, People’s Leasing, First Finance, Union Capital, International Leasing, BIFC, Fareast Finance, and FAS Finance.

Governor Mansur explained that the initial liquidation of nine institutions was guided by the government’s fiscal limit of Tk5,000 crore, selecting the NBFIs whose obligations could be covered within this ceiling.

Although Bangladesh’s deposit insurance scheme guarantees up to Tk2 lakh per depositor, NBFIs were only recently brought under the amended ordinance and have not yet contributed to the fund. Consequently, the government has decided to directly cover depositors in this round. Starting this year, all NBFIs will begin paying into the deposit insurance fund, bringing them under the same protection framework as banks.

Mansur added that the liquidation process has already begun, with all nine NBFIs served show-cause notices requiring them to justify why they should not be declared dysfunctional. “They are now being heard. If they fail to provide satisfactory responses, we will formally declare them dysfunctional and appoint liquidators,” he said.

The governor also noted that the Bangladesh Bank sees limited prospects for recovery, as assessments indicated no viable path for these institutions to return to solvency.